Study: Non-Physician Practice Ownership Hurts Care Quality
By Emma Freer

As the Texas Medical Association continues to fight for physician autonomy amid increasing consolidation, new research shows the downsides of hospital- and corporate-owned practice settings for patients and physicians alike. 

Nearly 60% of physicians employed in such settings say the ownership model results in lower quality of patient care, among other deleterious effects, according to a recent survey conducted by NORC at the University of Chicago and commissioned by the Physicians Advocacy Institute (PAI). TMA CEO Michael Darrouzet is vice president of the PAI board.  

“With corporate ownership comes a higher emphasis on financial outcomes and shareholder returns,” PAI CEO Kelly Kenney said in a Dec. 4 statement. “This focus on the bottom line can interfere with best clinical practices.” 

Nearly half of the 1,000 physician respondents (45%) also reported that ownership changes worsened the patient-physician relationship, such as by impeding communication between the two parties and decreasing the time physicians were able to spend with patients. 

Additionally, respondents underscored the consequences of such ownership models on physicians’ clinical decision-making. Among the key findings: 

• 61% of respondents reported moderate or low autonomy to refer patients outside of their ownership structure/system; 
• 56% said that cost of care to the patient has some impact on their clinical decision-making; and 
• 37% reported moderate or low autonomy in clinical decisions.  

On the administrative front, two-thirds of physician respondents reported having little or no involvement in practice management policies, and more than 40% expressed dissatisfaction with workforce-related issues, including hiring, staff management, and administrative support. 

The survey also delved into the factors driving physician respondents from independent practice to employment. More than half of respondents in this group cited public and private insurer pay cuts. Other motivations include work-life balance and compensation.  

Ms. Kenney hopes the research findings will inform future policies relating to employed physicians, who account for nearly 74% of the U.S. physician workforce, according to a June 2022 report commissioned by PAI. 

“As the structure of medical practice fundamentally changes, health care leaders and policymakers have a responsibility to make sure patients and their physicians remain at the center of health care,” she said in the statement.  

TMA already has taken up this mantle. At the federal level, the association strongly supports several pieces of legislation that would reform the Medicare physician payment system. One bill – the Patient Access to Higher Quality Health Care Act (House Resolution 977) by U.S. Rep. Michael Burgess, MD (R-Texas) – would repeal the ban on new physician-owned hospitals. 

“Physicians are in the best position to make decisions with and for their patients, so it’s not surprising that Congress is considering allowing new physician-owned hospitals that align the interests of ownership and practicing physicians to improve patients’ care,” Mr. Darrouzet said in an Oct. 19 statement.  

At the state level, TMA prioritized physician autonomy and corporate practice protections during the 2023 regular legislative session – and successfully prevented any new measures criminalizing patient care.  

The association also worked to improve legislation related to noncompete agreements, striking a balance that would work for both physician employers and employed physicians. Although the legislation didn’t pass, TMA staff experts say similar bills likely will resurface next session. Indicating the prevalence of such contracts, 60% of PAI survey respondents said their current employer required them to sign such an agreement.